NTPC stake sale likely on January 15

The government is likely to sell 9.5 per cent of its stake in the largest power generator NTPC on January 15 which could fetch the exchequer over Rs 12,000 crore at current market price.

If NTPC stake sale becomes successful, the government would be able to realise more than half of the targeted Rs 30,000 crore from disinvestment in the current fiscal. The government has already raised Rs 800 crore. It is selling 10 per cent stake iron ore miner NMDC on Wednesday, eyeing nearly 5,900 crore.

NTPC shares on Tuesday closed at Rs 154.30 a share, down 1.66 per cent on BSE. At the current market price, the government would be able to raise Rs 12,085 crore.

"NTPC is next on the government's divestment agenda. The issue is likely to hit the market around January 15, 2013," a source in the Finance Ministry said.

The government proposes to divest 9.5 per cent stake amounting to 78.32 crore shares of face value of Rs 10 in NTPC via Offer for Sale (auction) route, sources said.

Government holds 84.5 per cent stake in the Maharatna company. Post-disinvestment, the government stake would come down to 75 per cent.

NTPC became public with an initial public offer in 2004. Thereafter in 2009, the government further diluted its stake in the company through a Follow-on Public Offer (FPO).

The power generation company had reported a net profit of Rs 9,223.73 crore in the last fiscal as against Rs 9,102.59 crore in the 2010-11.

The market capitalisation of the company stood at 1,34,194.93 crore at the end of March 2012.

As part of the disinvestment process, the government has lined up around a dozen companies for stake sale to realise the target for the current fiscal.

Last month, the government initiated disinvestment process by selling 5.58 per cent stake in Hindustan Copper for about Rs 808 crore at an average price of Rs 156.56 apiece.

NMDC 10 per cent share sale is scheduled to take place tomorrow for which a base price of Rs 147 a share has been fixed. The offer can fetch Rs 5,828 crore to the exchequer, if the issue is fully subscribed at the base price.

The government, which has 90 per cent holding in the iron ore producer NMDC, plans to divest 39.65 crore shares, amounting to 10 per cent of its equity through offer for sale.